Excerpt: - - ' the resolution before us clearly shows that the conservator of forests was so authorised. dx-3), the divisional forest officer very clearly said as follows: three conditions have to be satisfied. the second condition is that in doing the said thing or delivering the said thing, he must not intend to act gratuitously and the third condition is that the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof. if these conditions are satisfied, section 70 of the contract act imposes upon the latter person the liability to make compensation to the former in respect of or to restore the thing, so done or delivered. k gsa so uho iho 25 esa iwjh fo h ugha nh gsa**it is obvious enough that the kacha hisab was the best evidence. a partly in..........that the contracts were not complete; that they were invalid for want of registration; that the forest department was bound to preserve and protect lac produce after it had been auctioned; that the plaintiff was entitled to refund of rs. 35,680/-; that the plaintiff had a net gain of rs. 9642/7/-; and that the state was not entitled to recover the remaining instalments. (contd. on col. 2) in the result, he declared that the four lease deeds were void and after deducting the net profit of rs. 8087/5/6 out of the instalments paid, i.e. rs. 43,768/-, passed a decree in favour of the plaintiff for the refund of rs. 35,680/- together with interest at 6 per cent. he further issued an injunction permanently restraining the state from realising rs. 27,900/- or any rental arrears through the.....

Judgment:

Shiv Dayal, J.

1. On the vesting of the Malguzari villages under the M. P. Abolition of Proprietary Rights Act, 1950 (No. 1 of 1951) (hereinafter referred to as the Act), on September 28/29, 1951, the Conservator of Forests. Eastern Circle, put to auction the right to propagate and collect lac in five malguzari forests in district Balaghat. They were leased out to Jhankar Singh (Plaintiff) for Rs. 98,500/-. The lease was from September 29, 1951 to June 30. 1954. It is not now in dispute that the plaintiff worked the contract. Although it is his case that possession was not formally given to him, he says 1hat he worked the contracts, out of a sense of duty over some of the portions of leased forests. According to him, the period for which he worked the contract was from November 24, 1951, to May 26, 1952, during which period he collected lac weighing 337 maunds worth Rs. 16,290/-, which gave him a net profit of Rs. 8087/5/6. According to the plaintiff, he did not work the contract, nor was in possession thereafter. He paid the following instalments :--

29-9-1951

.

Rs. 4,000/-

6-12-1951

.

Rs. 9,334/-

18-12-1951

.

Rs. 19,501/-

14-4-1953

.

Rs. 10,833/-

Total

Rs. 43,668/-.

Adding a sum of Rs. 100/- for coercive process the total amount paid, according to the plaintiff, is Rs. 43768/-.

2. Jhankar Singh (plaintiff) brought the suit from which this appeal arises, when coercive process was issued for the recovery of Rs. 32,834/- by the Tahsildar. His contentions in the suit were, firstly, that the Conservator of Forests had no authority to enter into the contract; that possession was not given to him and the ureas leased out were not pointed out to him; and that third persons interrupted his possession and did not allow him to work the contract. He claimed a refund of the instalments paid by him, giving a deduction of the net profit earned by him. He sought a decree for refund of Rs. 35,680/- in consequence of a declaration that the lease deeds are void. He further claimed an injunction to restrain the Naib Thasildar's Revenue Court at Balaghat from realising Rs. 27,900/- or any other arrears on the basis of the aforesaid leases.

3. The suit was resisted by the defendant-State, inter alia, on the ground that the leases were valid; that the plaintiff actually worked the contract; that he was liable to pay the outstanding instalments; and that he was not entitled to any refund.

4. The trial Judge found that the leases were illegal and void; that the contracts were not complete; that they were invalid for want of registration; that the Forest Department was bound to preserve and protect lac produce after it had been auctioned; that the plaintiff was entitled to refund of Rs. 35,680/-; that the plaintiff had a net gain of Rs. 9642/7/-; and that the State was not entitled to recover the remaining instalments. (Contd. on Col. 2) In the result, he declared that the four lease deeds were void and after deducting the net profit of Rs. 8087/5/6 out of the instalments paid, i.e. Rs. 43,768/-, passed a decree in favour of the plaintiff for the refund of Rs. 35,680/- together with interest at 6 per cent. He further issued an injunction permanently restraining the State from realising Rs. 27,900/- or any rental arrears through the process of the Naib-Tahsildar's Revenue Court. Aggrieved by the decree of the trial Court, this appeal was preferred by the State. 5. It is first contended by the learned Deputy Advocate General that there was no defect in the contracts which were signed by the Conservator of Forests on behalf of the Governor. These contracts were executed in the name of the Governor and were signed by the Conservator of Forests. The question is whether there was compliance with the requirements of Article 299(1) of the Constitution. All contracts made in exercise of the executive power of the State have to be made by the Governor and have to be executed on behalf of the Governor 'by such persons and in such manner as he may direct or authorise.' The resolution before us clearly shows that the Conservator of Forests was so authorised. By Resolution dated January 26, 1950, published in the M. P. Gazette dated February 3, 1950, the Conservators of Forests were authorised to execute contracts and other instruments in matters connected with the administration and working of forests and with the business of the Forest Department generally, 'to such extent and within such limits as the Government may by notification in the Official Gazette prescribe.' The other authorities so authorised were the Chief Conservator, Deputy Conservators, Assistant Conservators and Extra-Assistant Conservators of Forests. The relevant portion of the resolution may be reproduced as follows:--

'No. 240-59-XIX.-- In exercise of the powers conferred by clause (1) of Article 299 of the Constitution of India, the Governor of Madhya Pradesh is pleased to direct that the undermentioned classes of contracts and assurances of property made in exercise of the executive authority of the State of Madhya Pradesh shall be executed as follows:--

XX XX XX C. Inthe case of the Forest Department.Contracts and other instrumentsin matters connected with the administration and working of forests and withthe business of the Forest Department generally.

By the Chief Conservator, Conservators,Deputy Conservators, Assistant Conservator and Extra-Assistant Conservatorsof Forests to such extent and within such limits as the Govermnt may by notificationin the official gazette prescribe.'

From time to time, the authorities of the Forest Department had been authorised to execute contracts on behalf of the Governor. By Notification No. 1119-236-XV dated December 20, 1929, published in the Central Provinces Gazette, dated January 4, 1930, Part I (page No. 11), the Government prescribed the extent to which and the limits within which the officers of the Forest Department specified in the schedule could execute the contracts and other instruments. The relevant part reads as follows:--

'Classes of deeds, contracts and other instruments.

By Conservator

5. Contracts for the sale of forest produce:--

(a) When payment is received in full at the time ofdelivery..

.

30,000

(b) When payment is not received in full at the time ofdelivery..

.

5,000'

The expression 'payment is received in full at the time of delivery' is explained in the notification itself so as to include payment by instalments. It reads thus:--

'Payment in instalments may, however, be considered as payment in full at the time of delivery provided that there is a clause in the agreement to the effect that when the Divisional Forest Officer considers that the value of any forest produce removed' by the purchaser equals or exceeds the amount of purchased money paid by him upto that lime, the Divisional Forest Officer may stop further removal until the purchaser has paid such further sum, as in the opinion of the Forest Officer, may be sufficient to cover the excess value of the forest produce removed or about to be removed.'

6. The above limit of Rs. 30,000/-was raised to Rs. 50,000/-, by order dated July 18, 1951 (vide Memorandum No. 2234-1727-XI dated July 18, 1951) and notification No. 261, dated August 23, 1951. Thus, the Conservator of Forests was authorised to execute, on behalf of the Governor, contracts for the sale of Forest produce, when the payment was received in full at the time of the delivery, to the extent of Rs. 50,000/- (the expression 'payment received in full' being read according to the explanation given at the end of the notification). See also the compilation, called the Forest Financial Rules, 2nd Edition (1957) published by the Government of M. P. at pp. 77, 78 and 79.

7. There can be no doubt that the contracts in the present case were for sale of forest produce. It is, however, contended for the plaintiff-respondent that these forests, in respect of which the Conservator of Forests executed the contracts, were never transferred to the Forest Department. By virtue of Section 7 of the Abolition of Proprietary Rights Act, it was the Deputy Commissioner who took over possession of the lands which vested in the State in consequence of the vesting under the Act. The Deputy Commissioner alone, therefore, could execute such contracts. The learned trial Judge accepted this contention. He held that since the Deputy Commissioner was the agent nominated by the statute, he alone could take possession of the lands which vested in the State in consequence of vesting and it was the Deputy Commissioner alone who could grant a lease on behalf of the State. Learned counsel laid some emphasis on Ex. P-32, which is a memorandum dated August 30, 1951, from the Government of M. P.. Revenue Department, addressed to all Deputy Commissioners of the State, to the effect that the State Government directed that the leases of lac in villages vesting in the State under the Act, of which possession had been taken over by the Deputy Commissioners, should be granted in consultation with the Divisional Forest Officers or other officers for a period of three years, subject to the conditions prescribed in the memorandum. One of the directions was that the procedure for the grant of leases and realisation of the lease money to be followed was that which was followed by the Forest Department. On that basis, it is urged that it was only the Deputy Commissioner, who could grant a lease.

8. In the present case, positive evidence was led by the State to prove that the relevant forest areas were transferred to the Forest Department. Shri Birabhsingh (D. W. 1), who was then the Divisional Forest Officer, says in his deposition that he took possession of these forest areas. He says that after the Abolition of Proprietary Rights, the Zamindari forests were to be looked after by the Forest Department as directed by the Deputy Commissioner and the Conservator of Forests. He filed his report to that effect. In his report (Ex. DX-2) the D. F. O. says that he had taken over 5 Zamindaries, totalling 369 sq. miles details of which were mentioned in his earlier report dated July 26. 1951, and that he had put the Forest Ranger Sunderlal in charge of Lanji Range from July 21. 1951. This report (Ex. DX-2) is dated August 8, 1951. In the earlier report (Ex. DX-3), the Divisional Forest Officer very clearly said as follows:--

'All the forests of Balagbat district are transferred to the Forest Department, irrespective of the fact, whether the Forest Department has taken them over or not.........I am taking over only 339 square miles comprising the five Zamindaries of Behela, Bijagarh, Saletakri, Hatta and Kinni..... Since the staff is sanctioned already, I am taking the five Zamindaries totalling 369 square miles, for which you have already issued instructions and for which I am putting Dy. R. Sunderlal as R. O. Lanji with immediate effect. Orders for his posting as R. O. Lanji may kindly be passed early.' In his deposition, he says that before disposal of the forest produce by auction, the forests of Hatta Zamindari were taken in the management by the Forest Department. He further deposed that permits were issued by him to the plaintiff. They are Exs. DX-4, DX-5, DX-6 and DX-7. Having regard to the statement of Birabhsingh and supporting documentary evidence, we have no doubt that there was a transfer of the management of the forest areas of the former Zamindari villages in Hatta, to the Forest Department. That being so, the Conservator of Forests was, by virtue of the notifications abovesaid, empowered to execute contracts and leases on behalf of the Governor. The fact that the right to propagate was auctioned by the Forest Department and the further fact that the plaintiff worked the contracts and paid instalments to the Forest Department further goes to show that as a matter of fact possession of the forest areas was transferred by the Deputy Commissioner to the Forest Department. This lends further support to the presumption which can legitimately be made under Section 114 of the Evidence Act that official acts are regularly performed. See Maharaja Pratap Singh v. Thakur Manmohan, AIR 1966 SC 1931.

9. For these reasons, we accept the appellant's contention that the contracts executed by the Conservator of Forests complied with the requirements of Article 299(1) of the Constitution.

10. The consequence of the above finding will be that the plaintiff is not entitled to any refund of the instalments paid by him; nor is he entitled to any injunction, which means that the suit should be dismissed in toto.

11. However, it will be appropriate that we now deal with the second contention raised for the appellant State. If we had held that the agreements did not comply with the requirements of Article 299(1) of the Constitution, the further question was whether the plaintiff was entitled to refund of the instalments, after deducting the gain that he had received. In Mulamchand v. State of M. P., AIR 1968 SC 1218, their Lordships have said that such a decree can be passed by virtue of Section 70 of the Contract Act. Three conditions have to be satisfied. The first condition is that a person should lawfully do something for another person or deliver something to him; the second condition is that in doing the said thing or delivering the said thing, he must not intend to act gratuitously and the third condition is that the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof. If these conditions are satisfied, Section 70 of the Contract Act imposes upon the latter person the liability to make compensation to the former in respect of or to restore the thing, so done or delivered. In the present case, burden was on the plaintiff to prove what he had done. In other words, he had to show how much he had earned from the forest. Then alone, he was entitled to the balance outstanding from the amount of instalments paid by him totalling Rs. 43768/-. The plaintiff produced some accounts, but they were not the original accounts, which had been written at the time of the transactions. It is admitted by the plaintiff in his deposition that the accounts were first written in the Kacha book and then they were transferred to another account book. The latter was produced but not the former. He admits this in paragraph 38 of his deposition. He says that the accounts which he had filed (Ex. P-25) were written on the basis of 'Kacha Hisab', meaning, entries which were made at the time of the transactions. He further admits that those original accounts were in his possession, but he did not produce them. He further admits in his deposition (para 52) that Ex, P-25 does not disclose all the sales made by him.

It is obvious enough that the Kacha Hisab was the best evidence. It was not produced by the plaintiff and a presumption should be made that if he had produced those accounts, they would have gone against him. A partly in possession of best evidence, which would throw light on the issue in controversy must produce it and if important documents are withheld, which are in possession of a party, a presumption would be made against him. In Murugesam Pillai v. Gnana Sambandha Pandara Sannadhi, AIR 1917 PC 6, which was approved by their Lordships in Gopal Krisbnaji v. Mohd. Haji Latif, AIR 1968 SC 1413, the rule laid down is that even if the burden of proof is on the opposite party, material documents must be produced and the party in possession cannot rely upon the abstract doctrine of onus of proof. The Privy Council deprecated the practice of a party to a proceeding not producing important documents in his possession and relying on the abstract doctrine of onus of proof. These observations of the Privy Council and the Supreme Court apply here with greater force, because, here, the burden was on the plaintiff to prove the accounts. Not only that he did not produce the Kacha accounts, he had also to admit that the accounts produced by him (Ex. P-25) did not contain all the sales made by him.

12. There is another aspect of the matter on which learned Deputy Advocate General laid great emphasis and, in our opinion, rightly.

13. The trial Court has found that 425 maunds of lac was extracted by the plaintiff, but it is clear from the evidence of the plaintiff himself that on January 21, 1952, he sold 1574 maunds of lac to Shivdayal Seth, who took it to Gondia and on February 1, 1952, he sold 45 maunds of lac to Shivdayal. These items were not shown in the accounts (Ex. P-25). Thus the total quantity of lac extracted by him durine the year 1951-52 comes to 627 1/2 maunds. The plaintiff did not furnish accounts of extraction of lac during the year 1952-53. It is contended for the State that since he went on paying instalments, the last of which was paid on March 18, 1953, he must have worked the contracts during that year as well. The learned Deputy Advocate General wants 627 maunds to be added for the year 1952-53 also. He argues that at least 1000 maunds car be taken in round figure for both the years. He then refers to the accounts (Ex. P-25), where lac was shown as sold at the rate of about Rs. 60/- per maund. The plaintiff, in his statement, said that at the time of the contract, the rate of lac was Rs. 70/-to Rs. 80/- per maund. At the alleged rate of Rs. 60/- per maund for 1000 maunds the total price of lac extracted comes to Rupees 60,000/-. Deducting Rs. 10,000/- as cost of extraction (at Rs. 10/- per maund), the net gain can be assessed at Rs. 50,000/-. The plaintiff has deposited only Rs. 43,000/- odd. He is, therefore, not entitled to any refund.

14. By virtue of Section 90 of the Registration Act, a lease granted by the Government does not require compulsory registration.